MemeStrategy (2440) H1 2023 earnings summary

Executive summary

• H1 2023 revenue rose 109.6% YoY to RMB176.744m and net profit increased 71.1% to RMB10.291m; gross profit fell 9.0% to RMB27.203m.

• Adjusted net profit, excluding listing and share option expenses, was RMB12.178m versus RMB13.106m in H1 2022.

• Operating cash flow was an outflow of RMB32.6m, reflecting higher receivables and lower other payables and accruals.

Financial highlights

• Revenue was RMB176.744m versus RMB84.316m; cost of sales rose to RMB149.541m from RMB54.412m, while gross profit declined to RMB27.203m from RMB29.904m.

• Profit before tax rose to RMB12.049m from RMB5.979m; net profit was RMB10.291m versus RMB6.016m.

• Basic EPS was RMB4.58 cents versus RMB3.18 cents; diluted EPS was RMB4.55 cents versus RMB3.18 cents.

Outlook and guidance

• Upgrade data transmission equipment and technology for private 5G and industrial IoT services; extend the Universal IoT Platform to support industrial IoT applications.

• Expand R&D talent, training and infrastructure to strengthen product and service development capabilities.

• Broaden the customer base through stronger marketing and business development, and selectively pursue strategic acquisitions to expand offerings, technology and market position.